DOUBLE LEVERAGE?

Oil prices are down about $30 from their highs; great news for consumers and the big oil importers (China, Korea, India). Not so good news for the big producers (Saudi, Russia, Venezuela).

Oil companies have been borrowing more, but most of the major multinationals have very strong balance sheets and generate a great deal of cash. But the biggest oil companies in the world are state-owned, and they have been especially thirsty for debt. The Latin American giants stand-out:

• Petrobras has $147 billion of sales and $123 billion of debt
• PDVSA has $127 billion of sales and $120 billion of debt
• Pemex has $127 billion of sales and $134 billion of debt

So not only are these companies levered to the price oil, they are levered to interest rates as well. Double down?

• 18 Sep, 2023

  Beach Reading

  September is still beach time, so I have a few more recommendations for you. One nonfiction and four fiction, including ...

• 11 Sep, 2015

  Mauled

  Investors in Emerging Markets could be forgiven for feeling as if they've gone 15 rounds with Ronda Rousey (see below). ...

• 28 Jan, 2015

  Consensus

  Europe is a mess, everyone agrees: poor demographics, sclerotic and oppressive regulation, political dysfunction. ...